Trade-Offs between Opportunity Neighborhoods and Affordable Neighborhoods

Are the neighborhoods that are affordable to low-income renter families the same neighborhoods with opportunities for their children? A new paper by Dolores Acevedo-Garcia and colleagues considers the relationship between the Location Affordability Index (LAI) and the recently developed Child Opportunity Index (COI). The LAI is a measure formulated by the US Department of Housing and Urban Development and the US Department of Transportation that considers both housing and transportation costs as a measure of neighborhood affordability. The COI is an aggregate measure of neighborhood opportunity for children, incorporating 19 indicators across three domains: education, health and environment, and socioeconomic opportunity. Analyzing census tracts in the 100 largest US metros, the paper explores how the LAI and COI vary across neighborhoods for low-income, single-parent, renter families.

Greater neighborhood opportunity is related to lower affordability, but the relationship is stronger between opportunity and housing costs than between opportunity and transportation costs. Also, cost burdens for low-income renter families are relatively high across all levels of neighborhood opportunity. Further, poor black and Hispanic children are most disadvantaged in neighborhoods where cost burdens exceed relative neighborhood opportunity levels. The authors argue for an enhanced definition of affordability that incorporates opportunity, in addition to housing and transportation costs. They further posit that addressing sprawl could prevent higher transportation costs and that rental subsidies should be expanded to allow for greater family mobility to higher-opportunity neighborhoods.

Key findings:

• Housing affordability varies measurably across metros, but transportation costs vary even more. Neighborhoods with higher housing costs typically have higher levels of opportunity for children. The relationship is weaker between transportation costs and opportunity.
• Greater sprawl is associated with higher transportation costs.
• Low-income black and Hispanic children are more likely than white children to live in neighborhoods with higher-than-expected cost burdens given the neighborhood’s level of opportunity.